HBR May 2016: Managing for an unpredictable future

Harvard Business Review

May 2016

Annotated table of contents

1. Adi Ignatius, Toward a more agile future

Adi Ignatius, the editor-in-chief of HBR, introduces the issue, highlighting articles on learning from failure, agile methodologies and planned opportunism.

Idea Watch

2. HBR Team, Creative job titles can energize workers

Research by Dan Cable, of London Business School, has shown that by allowing workers to create titles for their jobs, in addition to the usual organizational structures and denominations can be a great motivator. Such ad-hoc titles capture workers’ sense of what they do and what they contribute, enhancing their feelings of ownership. Equally, they help employees to absorb more quickly the negative or stressful aspects of their jobs.

3. Scott Berinato, “Sleeping on it” doesn’t lead to better decisions

This interview with Rebecca Spencer of UMass Amherst reports on her research (with Uma Karmarkar of Harvard Business School and Baba Shiv of Stanford Business School) about the effect of sleep on our ability to process information and make decisions. While sleeping, our brains process impressions moving them from short-memory to long-memory; details are lost, with a tendency to recall mainly the positive aspects of past experience. This may make decisions between alternatives less clear-cut and thus more stressful, leading to less satisfaction and confidence that they were ‘good decisions.’

How I Did It

4. Stephane Kasriel, CEO of Upwork, on how an introverted engineer learned to lead

Despite his natural liking and ability for solving technical problems, seeing the failures of others in start-ups, Kasriel set out to develop his social skills and a taste for being with and leading people. How did he do it? Patient, deliberate and systematic in this work, over a decade or so, he sought a number of roles, including sales at a larger organization, and challenged himself to network widely, learning both through experience and reading (a list of books for would be CEOs is provided). As a CEO he believes that most of his job is about listening, in order to ‘help people feel excited about their work, empower them, and give them the resources they require to do their jobs well.’

The Big Idea

5. Darrell K. Rigby, Jeff Sutherland and Hirotaka Takeuchi, Embracing agile

Agile innovation, or simply agile, has become one of the most common concepts in managerial conversations in recent times. As the method has shown its benefits in IT and software development, it has stimulated interest across companies and industries, from wineries to GE, to private equity companies. Early leaders in defining and advocating the method, Rigby, Sutherland and Takeuchi return to the topic here to clarify the agile values and principles, which favour people over processes and tools, working prototypes over excessive documentation, responsiveness to change over loyalty to an established plan, and customer collaboration over rigid contracts. They also recommend six practices that can facilitate the spread of agile: learn how agile really works; understand where agile works and doesn’t work; start small and let the word spread; allow ‘master’ teams to customize their practices; practice agile at the top; and destroy the barriers to agile behaviours.

Spotlight: Managing for an unpredictable future

6. Vijay Govindarajan, Planned Opportunism

Govindarajan, the author of the best-selling book The Three Box Solution: A Strategy for Leading Innovation, which explores the dilemmas of simultaneously delivering on present commitments while preparing for the future, gives us in this article a nugget of his broader argument, namely his concept of ‘planned opportunism.’ While the future is essentially shaped by nonlinear change, making us all by necessity opportunists, adapting to changes outside our control, it is possible to respond to such challenges in a planned, systematic manner. Examples considered here in some detail include: the decision of Tata Consultancy Services to exit the call centre business, despite increasing demand, in order to focus on developing higher value added services; Hasbro’s response to changing demographic and life-styles by expanding their offering of games to the digital space; the development of a proprietary car model by Indian auto parts-maker Mahindra & Mahindra; and the setting up and development of the emerging opportunities unit within IBM to experiment turning the company’s research capability into new businesses.

7. Wendy K. Smith, Marianne W. Lewis and Michael L. Tushman, “Both/And” Leadership

The shift from ‘either/or’ to ‘both/and’ thinking about business problems and solutions can have enormous benefits. Instead of struggling to prioritize contradictory demands, deliver today or innovate for tomorrow, attend to local or global concerns, customers’ or shareholders’ needs, realise that these objectives are interdependent and need to be balanced on an on-going basis. Intrinsically paradoxical, these tensions mean that absolute consistency is impossible to achieve. Focusing on purposeful micro-shifts to keep all of these objectives in balance can eliminate unnecessary oppositional conflicts. Assumptions and behaviours, in regards to what counts for truth, availability of resources and the role of management, are different in the conventional and paradoxical approaches. Tolerance for multiple, often inconsistent, perspectives replaces the assumption that ideas, beliefs and identities are internally consistent and coherent. Resources can be abundant, expansive and generative, they do not have to be scarce. Embracing dynamism and change, management may be about coping rather control and the pursuit of stability and certainty.

8. Paul J. H. Schoemaker and Philip E. Tetlock, Superforecasting: How to upgrade your company’s judgement

Schoemaker and Tetlock report here on the experience with the Good Judgement Project and their participation in four rounds of competition between would-be forecasters organized by IARPA (Intelligence Advanced Research Projects Activity) to determine how predictions can be made more reliable. Some questions about the future may be trivial, as their answer is known, while others might be radically unknown. However, in the ‘sweet spot’ of questions whose answer can be given with some approximation and checked after the fact, it is possible to develop techniques for better forecasting. In a nutshell, teams of trained individuals work better than untrained or trained individuals on their own. The article presents proven techniques to assess accuracy and improve it over time, to develop particular traits and attitudes for forecasters and to manage the forecasting teams.

9. George Stalk Jr and Ashish Iyer, How to hedge your strategic bets

Stalk and Iyer introduce here the concept of ‘strategic options’ on the model of ‘financial options’, bets on particular strategic developments in the future. While recognising the challenges of execution, they propose three types of strategic options: temporary organizations, exploratory acquisitions and disposable factories. For instance, Orbitz was set up as a temporary organization by a group of US airlines to compete with Travelocity and Expedia, by providing fuller and unbiased listing of flights. Using contract staff and consultants to start small and keep initial investment low, Orbitz proved its viability and was gradually transformed into a permanent organization. To test whether it would be able to offer its products and services to clients in the life sciences industry, Brooks Automation, a leading producer of precision-materials-handling equipment, at first purchased two small companies in that industry, RTS Life Sciences and Nexus to prove the concept. Disposable factories are often used by Chinese companies to take advantage of flexible location and cheap labour. Among Western companies, Procter & Gamble has also used modular factories effectively.


10. Julian Birkinshaw and Martine Haas, Increase your return on failure

Just as the calculation of the return on investment tends to focus minds and remains a key organizational metric, Birkinshaw and Haas propose that we should calculate the return on failure as a ratio between assets (lessons and insights learned) and the cost of failure. The more we learn from failure, and provided that the cost of the inadvertent failures is affordable, the more we increase our return on failure, making productive use of investments that did not pan out as hoped or expected. After offering a methodology to estimate return on failure, the authors suggest three steps for making the most of this metric: learn from every failure, by conducting fast, frequent and forward-looking failure reviews; share the lessons across the organization; and review your pattern of failure from time to time. There is an extended case study on failure reviews as used at Roche, the pharmaceutical company. Shorter selected examples include a UK daily newspaper, Engineers Without Borders International, and a mining company.

11. Adi Ignatius interview with Hewlett Packard Enterprise CEO Meg Whitman: We need to intensify our sense of urgency

Since taking over as CEO of HP in 2011, Meg Whitman has implemented a strong turnaround program involving significant lay-offs (about 80,000 people out of a 300,000-strong workforce) and the eventual split of the company in HP Enterprise (currently led by Meg Whitman) and HP Inc. (led by Dion Weisler and focusing on the PC and printing side of the business). In the process, without producing a big bang, eye-catching major innovation, HP has nonetheless moved many of its products, across 26 categories, in the leading cohort according to industry reviews carried out by Gartner and IDC. Whitman explains here the reasoning behind these choices, her leadership style and lessons learned during her long and successful career. Before joining HP, Whitman was CEO of eBay for many years and had an unsuccessful run for governor of California. The public scrutiny that came with running for public office was, she said, what made the initial criticism and scrutiny she encountered at HP much easier to deal with.


12. Tiziana Casciaro, Francesca Gino and Maryam Kouchaki, Learn to love networking

Casciaro, Gino and Kouchaki provide four ways to frame networking that could make it less of a daunting or unpleasant necessity. Think of networking and social events in terms of opportunities to learn and you may be pleasantly surprised. Cultivate contacts and relationships with people who share your interests and look for genuine affinities. While it is obvious that senior people have a lot to give, junior people may also be able to devise more creative ways to make a contribution, for instance by showing appreciation and gratitude publicly or by organizing social events. Finally, see the exposure you receive through networking as a way of serving a higher purpose, a broader community.

13. John A. Quelch, Carin-Isabel Knoop, and Amy Gallo, Case study: Should you address a colleague’s erratic behavior?

This case study discusses the possibility that a colleague might be experiencing a bout of mental illness, when his behaviour has gone beyond merely quirky, threatening to create delays and set-backs for the business. Experts and members of the HBR community offer advice.

14. Daniel McGinn, Office exposé

McGinn reviews three books by former employees dealing with dysfunctional office cultures at a start-up, a fashion magazine and a political campaign. Why is it that we enjoy the genre of office exposé so much?

15. Alison Beard: Life’s work, an interview with Isabel Allende

Isabel Allende speaks about the routines that anchor her creative work, healing through writing, vulnerability and self-reliance, her determination to have a family and to live a larger, more public life. While often very personal, her books are widely translated and resonate across cultures. She says ‘I’m not vulnerable because of the truth I tell, only because of the secrets I keep.’